Global investors focus on the 19th CPC National Congress starting from Xi Jinping’s speech – Bloomberg

Global investors focus on the 19th CPC National Congress starting from Xi Jinping’s speech – Bloomberg

Pessimism about the Chinese economy and markets is growing. Ahead of the Chinese Communist Party Congress in Beijing on June 16, investors are watching how the party leadership will steer the economy out of the downturn.

The CPC Congress kicked off with a speech by General Secretary Xi Jinping. The CSI 300 index of Chinese stocks is down 24% this year. The offshore yuan has lost about 11 percent of its value against the dollar so far this year, on track for its biggest annual decline since 2010. For the first time in more than 30 years, China’s economic growth rate surpassed that of other emerging economies in Asia as a whole.Looks like it’s going to drop.

A drastic policy shift is unlikely given that Xi seems certain to break the mold and enter a third term, but the new leadership could refocus policy toward growth and supporting markets. It is possible.

After the “zero corona” policy to completely contain the new crown virus, austerity policies in all walks of life, and the deterioration of relations with the United States, the party has become more concerned about security and development.The new focus is on how to balanceMacquarie Group is watching.

  “In the short term, there are few signs of improvement. There are two things that will define the recovery,” said Diana Choileva, chief economist at Enodo Economics.

zero corona

After the National Day (National Founding Day) holiday, the Party’s organs, the People’s Daily,In his comments, he defended Xi Jinping’s zero-corona policy. Many believe there will be no substantive policy changes, at least until next March’s National People’s Congress, when Xi ends his second term as president.

Studying the Politics of Chinese Elites at an American University“A lot depends on whether the new prime minister can use his political power to persuade Xi Jinping to allow some changes,” said assistant professor Zhang Yang.

Covid spreads in China

National Day holiday travel peak leads to rise in cases

Source: National Health Commission of China

Stocks could see wild swings after Xi Jinping’s speech. Here are some brands to look out for.

technological supremacy

Ahead of the Communist Party Congress, the Biden administration in the United States rolled out a sweeping anti-China statute aimed at thwarting China’s technological ambitions.

Chinese chipmakers sold off in stocks after the Biden administration’s announcement, but they could rise if Xi Jinping, who seeks tech supremacy, ramps up stimulus for science-focused industries.

Hang Seng Tech Index at lowest level since inception in July 2020

real estate recession

The real estate sector, once the backbone of the Chinese economy and a pillar of growth, is now a target for the government to clean up its debt overhang. But authorities are also trying to stem the slump in the housing market, with a string of stimulus packages rolled out by local governments in recent weeks suggesting looser policies are likely to continue.

  “We expect further gradual policy easing, but whether it will seep through remains a big question,” said Owen Gallimore, head of credit analysis for Asia Pacific at Deutsche Bank. A real recovery in the real estate sector depends largely on regaining the trust of homebuyers and a recovery in home sales and prices, and without the easing of the zero-corona policy it will be difficult.

bad year

New housing prices continue to fall under policy support

Source: National Bureau of Statistics

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low growth

According to the World Bank, China’s gross domestic product (GDP) is expected to grow 2.8 percent this year, well below last year’s 8.1 percent and outpacing East Asia and the Pacific’s expected growth of 3.2 percent.fall below.

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